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Indonesia GDP slowest in six quarters

Indonesia posted its slowest growth in six quarters in the first three months of this year as exports fell due to weaker global demand, and the central bank might have to hold its policy rate steady for the whole year to spur the domestic economy.

Growth could further slow this year to the lowest since 2009 if private consumption and investment fail to compensate for weaker exports, and with a likely rise in inflation expectations, investors may be tempted to sell Indonesian assets for now.

Government data on Monday showed first-quarter growth was 6.3 percent from a year ago, as expected, and still among the highest in the region, but exporters expect a shrinkage this year due to the weak recovery in the US and ongoing debt problems in the euro zone.